Is It Too Late To Consider TTM Technologies (TTMI) After Its Recent Share Price Surge?

• If you are wondering whether TTM Technologies at around US$164.64 still offers value after a strong run, or if you are late to the story, this article breaks down what that price represents.
• The stock has posted very strong returns, including 19.7% over the last 7 days, 72.0% over 30 days, 133.2% year to date and a very large gain over the last year and multi year periods, which can change how the market is pricing both upside and risk.
• Recent coverage has focused on TTM Technologies because of its share price strength, with attention on how the rally fits into the broader electronics and technology sector and what it might imply for sentiment around the business. This context is important when assessing whether current expectations built into the price are conservative or already ambitious.
• Simply Wall St currently gives TTM Technologies a valuation score of 1 out of 6. Next up is a closer look at how traditional valuation tools such as DCFs and multiples compare, and why a more rounded way of thinking about valuation later in this article could be even more useful.

TTM Technologies scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: TTM Technologies Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a stock could be worth by projecting its future cash flows and then discounting those back to today using an appropriate rate. It focuses on the cash the business might generate for shareholders rather than near term earnings headlines.

For TTM Technologies, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is reported at $43.19 million. Analyst projections and Simply Wall St extrapolations point to free cash flow of $401.61 million in 2028, with a series of forecast and extrapolated figures running out to 2035, all expressed in dollars and adjusted back to today using discount factors.

Adding these discounted cash flows together, the model arrives at an estimated intrinsic value of about $185.54 per share. Against a current share price of roughly $164.64, this indicates an intrinsic discount of 11.3%, and on this DCF view the stock appears to be undervalued.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests TTM Technologies is undervalued by 11.3%. Track this in your watchlist or portfolio, or discover 44 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for TTM Technologies.

Approach 2: TTM Technologies Price vs Earnings

P/E is a useful way to think about value for profitable companies because it directly links what you pay for each share to the earnings that share currently generates. In general, higher growth expectations and lower perceived risk can justify a higher “normal” or “fair” P/E, while slower growth or higher risk usually point to a lower one.

TTM Technologies currently trades on a P/E of 87.57x. That is well above the Electronic industry average P/E of 27.66x and also above the peer average of 50.76x. On a simple comparison, the stock carries a much richer earnings multiple than both its sector and closer peers.

Simply Wall St’s Fair Ratio framework estimates what P/E might be appropriate given factors such as earnings growth profile, profit margins, industry, market cap and company specific risks. For TTM Technologies, the Fair Ratio is 63.35x, which is lower than the current 87.57x. Because this approach adjusts for company characteristics rather than just comparing against broad groups, it can give a more tailored view of what investors are paying for each dollar of earnings.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your TTM Technologies Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Meet Narratives, a simple way for you to attach your own story about TTM Technologies to hard numbers like fair value, future revenue, earnings and margins. This allows the company’s story to connect directly to a forecast and then to a fair value you can compare with the current price on Simply Wall St’s Community page. Narratives are updated as new news or earnings arrive. One investor might build a bullish TTM Technologies Narrative around a Fair Value of about US$123.00, while another might take a more cautious view closer to US$72.00. This gives you a clear sense of which storyline you find more reasonable before deciding whether the stock looks attractive or stretched.

Do you think there's more to the story for TTM Technologies? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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